Operating Profit Margin Denominator

CFA Level II Equities
#1

According to Investopedia, Operating Profit Margin = Operating Profit / Net Sales

Net sales are defined as “Net sales are the amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any discounts allowed”

In CFA curriculum, is it assumed that net sales in the denominator of the profit margin equation is equal to revenue or are their times when the sales must be adjusted for deductions, allowances, and discounts?

#2

The first one approach is better but you may use second one if such required in curriculum. If there is no receivables impairments within period, the both approaches give same EBIT margin.

#3

You’re not going to see any discounts, returns, or allowances on the CFA exam. That’s not the point of the exam.